A few days ago, someone asked on the forum whether the price of housing has collapsed after falling so much. As a result, the comment section is almost one-sided that the decline in housing prices has only just begun, and that a bigger decline should be to come. Seeing this, I was immediately relieved, historical experience shows that the right direction often exists on the opposite side of the public, since everyone is so unanimous, then at least it means that the risk of real estate continuing to decline deeply is not large.
Recently, Huang Qifan has a discussion about real estate, which I personally think is very reasonable. The general idea is that from 2021 to 2022, the housing prices and property market transaction volume in the mainland have declined, in 2020, the annual transaction volume was 1.8 billion square meters, in 2021 it dropped to a little more than 1.5 billion square meters, in 2022 it will drop again to 1.4 billion square meters, and in 2023 it is estimated that it will drop to 1.3 billion square meters, and when this decline reaches about 1.2 billion square meters, there will be an equilibrium point. Because the whole of China's real estate built in use now has more than 50 billion square meters, theoretically 50 years of depreciation, that is to say, annual depreciation of one-fiftieth (2%), 2% of 50 billion square meters is 1 billion square meters, and then add there is always a structural demand adjustment, counting 200 million square meters, then the demand of 1.2 billion square meters should be a solid bottom.
This 1.2 billion square meters actually represents a rigid demand, in the case of the city is unlikely to shrink, every year there are some old houses scrapped at the same time, there must be new houses to add in, otherwise it will not be able to maintain the city's existing development state.
On this point, some people have raised new questions. The first is that with the decline in fertility and the decrease in population, there will be more and more surplus houses, and the demand will continue to decline, and the bottom limit of 1.2 billion square meters is built on the existing population base, which cannot withstand the destruction of time.
This view seems reasonable, but in fact it is quite absurd, because low fertility is not the same as a decline in population size, as we all know, Japan has entered a state of low fertility as early as the eighties of the last century, but the population of 123 million in 1990 will become 124 million in 2022, and there is no decline in population size at all, and what has changed in the meantime is only the adjustment of population structure. This is mainly due to the fact that while the fertility rate is declining, life expectancy is also increasing, the mortality rate is falling faster, and it is basically impossible to reduce the size of the population significantly without a few decades of long-term consumption.
Of course, some people will take the negative population growth of the mainland in 2023, but the situation in 2022-2023 is actually quite special, first, the concentrated wave of the new crown yang has taken away many people, so that the death base is much higher than in previous years, and second, due to the impact of the lockdown in 2022, the number of people who get married has also dropped to the ground, and even considering the factors that affect the body when the yang comes, there are many people who want to have children but do not give birth for the time being.
In addition, some people say that only young people like to change to a new house, timely consumption and entertainment, the material needs of the elderly are relatively low, and after the demographic change, it will also affect the market demand. In this regard, I would like to say that on the one hand, the thrift of the older generation comes from the habits of the younger generation, after all, thirty years ago, everyone was poor, and on the other hand, it is for the sake of the children, saving food and money just to feed the next generation. When the 80s and 90s generation is completely old, there is no need to think too much, the living and consumption habits of the young will be brought to the old age, not to mention that in the state of declining birthrate or even childlessness, if you don't consume in time, are you still ready to save money and donate it to the society when you die?
(Risk Warning: The views mentioned in this article only represent personal opinions, and the subject matter involved is not recommended, and you buy and sell accordingly at your own risk.) ）